UBS today raised its target price for IDB Holding Corp. Ltd. (TASE:IDBH) subsidiary Makhteshim Agan Industries Ltd. (TASE: MAIN) by NIS 3 to NIS 31 per share, while reiterating its “Buy1” recommendation. The new target price is almost 25% above Makhteshim Agan’s opening price on the Tel Aviv Stock Exchange (TASE) today. UBS’s analysts are displaying cautious optimism by raising their target price for the company.
UBS said the business fundamentals for the agrochemical industry have improved. “Currency fluctuations and weather are always uncertain for the industry, though we expect 2007 to offer some relief compared with 2006. Reduced oil prices and less intense sector competition also set the stage for a better 2007. In addition, high commodity prices for corn and sugar based on energy-driven demand set the stage for improved demand as farmers look to increase planted acreage.” However, the bank is “not looking for a huge recovery in 2007” for Makhteshim Agan.
UBS notes favorably that Makhteshim Agan chairman and CEO Avraham Bigger demonstrated in January that he intends to clean up the company’s internal issues as well. Bigger is considered a confident of IDB chairman and CEO Nochi Dankner.
In January, Makhteshim Agan announced that it would report $420 million revenue for the fourth quarter of 2006, in line with UBS’s forecast, but that it will report a net loss because of a number of one-time expenses.
Published by Globes [online], Israel business news - www.globes.co.il - on February 1, 2007
© Copyright of Globes Publisher Itonut (1983) Ltd. 2007